When Times Get Tough - Dealing With a Downturn
When times are tough, what's the first thing many owners and managers do? Cut costs. Trim the payroll. Defer purchases.
Now, there's nothing wrong with trimming expenses but few businesses have ever thrived because of a cost-cutting strategy. Creative, forward-thinking leaders know that tough times provide opportunities to re-think the way they do business. In fact, difficult financial circumstances can even provide the seeds for fundamental changes in operations and these changes can, in turn, pave the way toward stellar success in the future.
Think of yourself as one of those creative, visionary leaders. To move you toward a bright future, here's where to look for help:
Look to knowledge. Learn about your customers and prospective customers by examining the demographic and psychographic characteristics of your market. Just as important, look up industry data that summarizes customer needs and attitudes, and gear your marketing efforts toward what you learn.
Look to your present customers. Present customers are your best future customers. Let them know you're still there! Holiday cards, special promotions, referral programs, and get-reacquainted events all help draw them in.
Look to new customers. Yes, it's sometimes hard to stomach the thought of giving premiums or services away during tough times but offering nominally priced or free merchandise, samples, special training, or something else of value can bring new customers to you.
Look to your friends. You probably have a number of acquaintances from non-competing firms. Ask yourself: Can you develop cross-promotions with these individuals? Or can you conduct joint advertising or merchandising campaigns? These tools can bring new business your way, often at a fraction of the cost of traditional advertising.
Look to your employees. Any employee can be a source of fertile ideas for increasing revenue, generating new customer leads, or promoting your business. Building a sense of teamwork in-house can often be your best insurance against an economic downturn.
Look to rewards. Don't hesitate to show your appreciation to employees during tough times. And don't hesitate to reward top performers — the people who make aggressive attempts to help you boost productivity and profit when you need it most.
Look to your communication tools. What vehicles can you use to communicate and sell to your customers for the first time? Billboards? Direct mail? The telephone? Special media? By selecting just one or two new communication vehicles, you may successfully reach new customers.
Look to products and services. Analyze your existing product line. Does it truly meet the needs and interests of your customers, present and future? If you could change something, what would it be? Product decisions can often spur new sales initiatives.
Look to your availability. Might you attract a new group of customers by making products or services available during expanded or different hours? Or can you sell on a 24/7 basis by building a new Web site or boosting the capability of your existing site?
Look to other professionals. Where do you need help in your profit-boosting efforts? With advertising and marketing? Communications? Technology? Employee development? Seek out top-notch professional assistance in your area of need, and remember that the money you spend on this is an investment.
Look to other locations. Where are your potential customers? Once you answer this question, figure out how you can get to them. Locating sales efforts at a new location, kiosk or counter, fair, or other venue might be the fastest way to reach more people.
Look to technology. Used wisely, today's technology can help you streamline operations and reach out to new customers. The World Wide Web and e-mail communication offer a myriad of powerful marketing opportunities. New database technology helps you simplify record keeping and retrieval. Self-paced tutorial CDs give you the opportunity to train employees at minimal cost. And the list could go on and on.
Look to your past successes. What accomplishments can you showcase to customers and the community? Do you offer products that solved real-life problems? Do you know people whose personal or business lives were simplified because of your efforts? Spreading the word through customer testimonials and your own powerful advertising sends the message that you have been and remain a great problem solver.
Look to your budget. While trimming expenses may not be a core strategy in tough times, take an hour someday and play "what if" with your budget. Better yet, ask a trusted colleague to look at your budget with an objective eye. The goal: To identify revenues that could be increased, or expenses cut, with a minimum of effort.
Look to your problems. In tough times, make a special effort to ferret out any problems that having been nagging you in recent years. Even better, make an effort to uncover problems you didn't know you had through intensive customer feedback. For example, suppose you pinpointed slow response time to customers or faulty display materials as perennial problems. Now would be the time to work on these two issues and to highlight the way you've improved your business operations as a result.
Look to your association. Now is also the time to comb through association studies, literature and convention materials covering profit-boosting strategies. This is like tapping into the minds of the world's experts, each of them able to offer you clues about what you can do to strengthen your own business efforts.
Look to you. Do you convey a positive, upbeat attitude about your business? Do you project confidence to those around you? Most important, are you ready and willing to promote and sell all the time? Answer "yes" to these questions and you'll travel squarely on the road to success.
About the Author
Richard G. Ensman Jr. is a free-lance writer based in Rochester, N.Y.